Learn how team leaders should choose the best real estate team compensation model based on a variety of different real estate team organizational structures.

Which real estate team compensation model should you use? What you pay your team members is important, and how you justify that pay structure is essential. Through using the Team Dashboard and The Matching Standard, you can clearly demonstrate the value of being on your team. Let’s dive in.

VIDEO: Choosing the Best Real Estate Team Compensation Model Based on Team Structure

When to start a team

Generally speaking, you start a team because you have to much business to handle yourself. Many people start a real estate team to bring them more business, and I’ve never seen that work. I usually say 30-40 transactions closed in one year indicates that you have enough business to start a team. Certainly if you hope to grow beyond this production level, you will need to make an administrative hire. If you try to go it alone at this point, your work/life balance will take a bad turn. As you make more income, you should be working less. Because, with more money, you can afford to hire people to help you.

Your first hire should be an administrative assistant. You can start with the small team organizational chart that we use here at Icenhower Coaching & Consulting. After your first admin hire, you can hire a few Buyers Agents. You typically need your second admin when your team starts closing 100 transactions per year. This is how the growth of your team starts!

For more on team structures, check out our blog on real estate team organizational structures.

Why agents join a team

Let’s review the three key benefits a team must provide its agents.

  1. Leads. Don’t start a team because you want more business. Start a team because you have more business than you can handle. You must be able to provide your team members more leads than they can generate themselves. We call this The Matching Standard. (We’ll talk a bit more about this in a moment.) It’s the secret sauce.
  2. Accountability, mentoring, and training. Everybody provides this — some better than others. This is the leadership you offer to your team members.
  3. Strong admin support. If you want a team member to be able to do more transactions, you must provide them with administrative support so they can focus on what they do best. Team members will be able to do three, four, maybe even five times the number of transactions per year if they have good admin support.
real estate team compensation model

How to pay team members and real estate team compensation models

This question comes up a lot. I get asked about which real estate team compensation model to use. When it comes to commission vs salary, you are going to pay different roles in different ways. Sales agents should always be paid by commission. This is motivating to sales people. Salaries do not seem to work for agents, certainly not on a long-term basis. On the other hand, admin need to be paid salary. To get good admin staff on a real estate team, you will need to pay them salary. Yes, hourly is o-k, but I believe that paying salary feels more “adult” and increases retention.

Almost all the teams I coach are on 50/50 splits. Unless one of the agents starts dramatically bringing in more leads than the team is giving them, keep it at 50/50.

You can use The Matching Standard to help agents see the value of being on your team. Let’s say the average agent closes 20 transactions. Of those 20, usually at least 15 are team generated and only 5 were brought to the team by the agent. Receiving leads from the team is a huge benefit of being a part of a team. At ICC we teach The Matching Standard, which dictates that the team “matches” all leads the team member brings to the team. This is part of the reason that the split is 50/50.

How to track team member activities

At ICC, we coach all our clients to use a dashboard. To teach this concept, we use an excel spreadsheet (because it is that simple.) A Team Dashboard tracks Activity Based Indicators (ABIs), Results Based Indicators (RBIs), Conversion Measures, Training Measures, and more. Meeting to go over the Team Dashboard on a weekly basis will create a culture of accountability and motivation on your team.

What’s more, it will also show team members where their bread is buttered. Within the RBI section, include a “Closed YTD” section. This is the most important section on your Team Dashboard. This will show exactly how many leads each team member closes from their own SOI vs team generated leads. If you use The Matching Standard, the team generated leads should be larger than the agent generated ones. This keeps agents in check and helps with retention. For more details on how to use your Team Dashboard and The Matching Standard, read this blog.

Recruiting course

We have scripts, dialogues, tracking systems, email templates, social media posts … all things needed for recruiting. Our Recruiting for Real Estate Agents course contains all the strategies that top recruiters in the country use. I’ve recruited thousands of agents in my career and I built this curriculum myself. If you’re looking to start a real estate team, or simply looking to grow your team the right way, take this course.

real estate team compensation model
Learn to grow your real estate business by targeting, connecting with and ultimately closing on the best recruits around. We’ll teach you how to find great candidates, qualify them, and say the right thing at the right time to bring them on board. Enroll Now!

Grow your team the right way

Hire an ICC coach! We literally wrote the book on high-performing real estate teams (see below). All top-performing teams have a real estate coach and success leaves clues. Why roll the dice with something as important as your business? Learn more about our coaching program and schedule yourself a free, no obligation coaching consultation call today.

The High-Performing Real Estate Team

The team building concepts we discussed today, and so much more, can be found in my most recent book. The High-Performing Real Estate Team digs a lot deeper into organizational charts and compensation models. This book will help you build a successful real estate team from start to finish.

This is the most thorough book on real estate teams ever written. I talk a lot more about the five key factors to building a high-performing real estate team. It has been a best-seller since it went live on Amazon, and you can read the reviews to see how it is making an impact on teams across the country.

real estate team compensation model

Want to learn more?

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Stay up to date on what’s happening in our industry and join our Facebook group, the Real Estate Agent Round Table for free, relevant content daily, including breaking news on the real estate market.

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